Who's going to buy it?

I don't understand the logic behind the Big 3 bailout. Okay, so they get billions to build more cars . . . that nobody is going to buy. Do the cars just sit there on giant lots rotting away? How does that really help anybody? It seems like a huge waste of materials and labor. Why continue to build things that nobody will buy? The credit bubble and housing bubble popped - the market the Big 3 enjoyed for the past decade is GONE and won't be back for a long time if ever. There are so many other industries in the same boat as the Big 3, just not on the same scale (and they may not have such a powerful union like the UAW lobbying Washington either). Do we bail out house builders so that they can continue to build houses that people aren't going to buy? Where they will lie vacant and decay too? How about boats? Or furniture? The market just isn't there anymore, and won't be for a long, long time. Giving these companies taxpayer money to keep building things people don't want to buy anymore just seems like insanity - or maybe more like good intentions with no chance of a good outcome.

And then you have people like Sen. Hutchinson wanting to take the $25 billion DOE money which was supposed to be used for R&D on new efficient and green engine development and other energy related R&D and use this money to keep the Big 3 up and running for a few more months. Talk about being short-sighted. I find the whole thing disgusting. The government has no idea what to do so they go about problem-solving in a knee-jerk, random action methodology. What's the first step in problem-solving? Determine what the problem is. I don't think any of the "leaders" in the US government can accurately define what problem it is they are really trying to solve. Deflation? Unemployment? Sorry, but the consumer economy based on runaway debt is over (at least for a while). It's a different game now.

I was complaining about the Big 3 over 5 years ago when the genius execs at the Big 3 announced that they had a new plan - to focus on making large SUV's and trucks. All I could think of was that they wanted to run their companies into the ground and destroy the UAW. It was pure idiocy. Well, here we are, but now the government wants to spend taxpayer money to keep these dinosaurs alive. Why? The management has been terrible for decades. Just go back to the EDS buy-out by GM in the 1980's and how Ross Perot tried to help them. GM management didn't want to change anything and bought out Perot, who had a seat on the board, for $700 million. Perot had said when they approached him with a buy-out he gave them what he thought was a ridiculously high number that they would never go for - but they did without hesitation. Advice from quality gurus like W. Edwards Deming went mostly unheeded as well. And the UAW has been a disaster for decades as well as helping to make sure that the Big 3 remain uncompetitive. The designers at the Big 3 have helped destroy the companies too. The Big 3 are all disasters from top to bottom and from all angles. These dinosaurs need to die.

When the Big 3 die other companies and new companies will start up and buy the plants and start designing and building cars people want. Will 1000's upon 1000's of people lose their jobs? Sure. But that is going to happen anyway - even with tens of billions of dollars in bail-outs. All the bail-outs do is prolong the inevitable. I would rather my tax dollars go toward the DOE R&D efforts for the future.

One other random thought - China. And all the toys they make. If China tries to prop up their toy making industry like the US is trying to prop up the Big 3 then who is going to buy those toys? Not the people in the US - they already have stopped buying them. And that's the problem. The toys are specifically designed for the US. Many of the Chinese don't even know what they are building, let alone would buy the stuff themselves. So inventory will stack up and rot. Again, how does that really help anybody? Unlike the US (at least for now) the Chinese I guess could force the people in China to buy some of the stuff. Maybe it will become mandated by the US government in the near future that every American family who makes over x dollars MUST buy a Big 3 auto - for the good of the nation. It's all getting too crazy to even think about.